New York: US President Barack Obama chastised Wall Street firms on Tuesday for resisting tighter regulations of their industry and said that they had not done enough to boost lending to small businesses.
Lashing out at the reckless speculation and shortsightedness he said: “We re behind the 2008-2009 financial crisis.” The US President also expressed frustration at criticism he has taken over the unpopular $700 billion bailout of the financial industry.
Obama told a Democratic party fund-raiser that his administration backed the bailout program, begun in the Bush administration, because it was necessary to prevent a financial collapse that could have devastated the economy.
“We also know we should never again have to face potential calamity because of reckless speculation and shortsightedness and self-interestedness from a few,” Obama said adding: “So if there are members of the financial industry in the audience today, I would ask that you join us in passing what are necessary reforms.”
The remarks were the latest in a series from Obama and his aides urging the financial industry to get behind a package of proposals under consideration in Congress that would tighten rules for derivatives trading and other activities while establishing a new consumer watchdog for financial products.
The administration is increasingly focusing on the disconnect between Wall Street, where the Dow Jones industrial average recently again rose about the 10,000 mark after collapsing in late 2008 and early 2009, and the rest of the weak economy, where small business are having difficulty getting credit and job losses are continuing.
Hefty profits and plans for big bonuses at firms like Goldman Sachs and other Wall Street firms that benefited from the bailout are fueling outrage on main street.
Obama plans to address the need for credit on Wednesday by unveiling a new set of initiatives that will increase credit flows to small businesses, partly by giving smaller banks better access to the bailout funds.
“When I hear stories about small businesses and medium-sized businesses not being able to get loans, despite Wall Street being profitable, that tells me people aren’t thinking about their obligations,” Obama said, chastising bigger banks.
He said that his regulatory-reform plans would ensure all financial institutions followed a similar set of rules.
“It’s good for our country and in the long run it will be good for the financial industry to have a level playing field in which everybody knows that the rules will be enforced and people are competing,” he said.